Exhibit
4.16


 


 


20
November 2003


 


 


CHINA UNICOM (BVI) LIMITED


 


 


CHINA UNICOM LIMITED


 












 


Conditional Sale and Purchase
Agreement relating to the entire

issued capital of Unicom New World (BVI) Limited


 












 

















 


CONTENTS


 


	
  Clause

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Definitions and
  Interpretation

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Sale of the Target Shares and Price

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Conditions Precedent

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Pre-Completion Undertakings

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Completion

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Post-Completion
  Undertakings; Restrictions on Vendor Group Companies

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Limitations
  on Claims

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Purchaser’s
  Rights to Rescission

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Withholding
  Tax and Grossing Up

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Entire
  Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Variation

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Assignment

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Announcements

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  16.

  	
  Confidentiality

  	
   

  
	
   

  	
   

  	
   

  
	
  17.

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  
	
  18.

  	
  Counterparts

  	
   

  
	
   

  	
   

  	
   

  
	
  19.

  	
  Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
  20.

  	
  Further
  Assurance

  	
   

  
	
   

  	
   

  	
   

  
	
  21.

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  22.

  	
  Governing
  Law, Jurisdiction and Service of Process

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 1

  	
   

  
	
   

  	
  DEFINITIONS AND INTERPRETATION

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 2

  	
   

  
	
   

  	
  CORPORATE STRUCTURE PRIOR TO COMPLETION

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 3

  	
   

  
	
   

  	
  THE WARRANTIES

  	
   

  



 

















 


	
  APPENDIX 1

  	
   

  
	
   

  	
  Prospective Cellular Connected Transactions
  of the Company

  	
   

  
	
   

  	
   

  	
   

  
	
  APPENDIX 2

  	
   

  
	
   

  	
  Prospective Cellular Connected Transactions
  of the A Share Company

  	
   

  
	
   

  	
   

  	
   

  
	
  APPENDIX 3

  	
   

  
	
   

  	
  The Restructuring Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNATURE PAGE

  	
   

  



 

















 


THIS AGREEMENT is made on
20 November 2003


 


BETWEEN:


 


(1)                                  CHINA UNICOM (BVI) LIMITED a company incorporated under
the laws of the British Virgin Islands whose registered office is at Craigmuir
Chambers, P.O. Box 71, Road Town, Tortola, British Virgin Islands (the Vendor);


 


(2)                                  CHINA UNICOM LIMITED a company incorporated under
the laws of Hong Kong whose registered office is at 75th Floor, The
Center, 99 Queen’s Road, Central, Hong Kong (the Purchaser).


 


WHEREAS:


 


(A)          As part of a series of restructurings,
Unicom New World Telecommunications Corporation Limited (the Target Company) has
acquired from Unicom Group the mobile communications networks in each of Shanxi, Hunan,
Hainan, Yunnan, Gansu and Qinghai provinces and Inner Mongolia, Ningxia Hui and
Xizang autonomous
regions (the Territory).


 


(B)           Pursuant to a reorganisation
agreement dated 14 November 2003, Unicom Centenarian (BVI) Limited (UCBVI), a
wholly-owned subsidiary of Unicom Group, acquired the Target Company Shares.


 


(C)           Pursuant to that reorganisation
agreement, UCBVI on-sold the Target Company Shares to its wholly-owned
subsidiary, Unicom New World (BVI) Limited (the Target Holding Company).


 


(D)          Pursuant to a conditional sale and purchase
agreement dated 20 November 2003 between the Vendor, UCBVI and Unicom Group
(the Initial Acquisition
Agreement), the Vendor agreed to acquire from UCBVI the entire
issued share capital of the Target Holding Company.


 


(E)           The Vendor is a subsidiary of the A
Share Company, a limited liability company whose shares are listed on the
Shanghai Stock Exchange. The A Share Company is in turn a subsidiary of Unicom
Group.


 


(F)           Immediately prior to the signing of
this Agreement, the corporate structure of the parties to this Agreement in so
far as it relates to the Target Group Companies (as defined herein) is set out
in Part A of Schedule 2.


 


(G)           The Vendor has agreed to on-sell the
Target Shares to the Purchaser for the consideration and upon the terms and conditions
set out in this Agreement.


 


(H)          The Vendor has agreed to make certain
representations, warranties and undertakings in relation to the Target Group
Companies.


 


IT IS AGREED as follows:


 


DEFINITIONS
AND INTERPRETATION


 


1.             Words and expressions used in this
Agreement shall have the meanings set out in Schedule 1.


 


SALE
OF THE TARGET SHARES
AND PRICE


 


2.1           The Vendor agrees to sell as legal
and beneficial owner, and the Purchaser agrees to purchase, the Target Shares.
The Target Shares shall be sold free from all security interests.


 


2.2           The total price payable on Completion
by the Purchaser to the Vendor for the Target Shares shall be HK$3,014,886,000
(the Total Price), payable
in cash.


 

















 


CONDITIONS
PRECEDENT


 


3.1           Completion of the sale and purchase of
the Target Shares shall be conditional upon the fulfilment to the reasonable
satisfaction of the Purchaser or (in the case of 3.1(b) and 3.1(c)) waiver of
the following conditions:


 


(a)                                  the passing of resolutions by
the independent shareholders of the Purchaser at its general meeting approving
(i) this Agreement and (ii) the Prospective Cellular Connected Transactions of
the Company;


 


(b)                                 the passing of resolutions by
the independent shareholders of the A Share Company at its general meeting
approving (i) the Initial Acquisition Agreement and (ii) the Prospective
Cellular Connected Transactions of the A Share Company;


 


(c)                                  there having been no material
adverse change to the financial condition, business operations or prospects of
any of the Target Group Companies;


 


(d)                                 the delivery by or on behalf
of the Vendor to the Purchaser of copies of all necessary Regulatory Approvals;
and


 


(e)                                  the completion of the Initial
Acquisition having taken place.


 


3.2           The Vendor undertakes to use all
reasonable endeavours to ensure that the Conditions Precedent set out in
clauses 3.1(b), 3.1(c), 3.1(d) and 3.1(e) are fulfilled to the satisfaction of
the Purchaser as soon as reasonably practicable and in any event by
30 June 2004.


 


3.3           The Purchaser undertakes to use all
reasonable endeavours to ensure that the Condition Precedent set out in
clause 3.1(a) is fulfilled as soon as reasonably practicable and in any
event by 30 June 2004.


 


3.4           The Purchaser shall be entitled in
its absolute discretion, by written notice to the Vendor, to waive any or all
of the Conditions Precedent set out in clauses 3.1(c) and 3.1(d) either in
whole or in part.


 


3.5           If any of the Conditions Precedent
has not been fulfilled (or waived) on or before the date specified in
clauses 3.2 and 3.3 or such other date as the parties to this Agreement
may agree in writing, this Agreement (other than clauses 1, 11 to 14, 16
to 22 and Schedule 1, which shall continue to be in force) shall automatically
terminate and no party shall have any claim of any nature whatsoever against
the other parties under this Agreement (save in respect of its accrued rights
arising from any prior breach of this Agreement).


 


PRE-COMPLETION UNDERTAKINGS


 


4.1           Pending Completion, the Vendor shall
procure that:


 


(a)                                  each Target Group Company
shall carry on its business in the ordinary and usual course and shall not make
(or agree to make) any payment other than routine payments in the ordinary and
usual course of trading;


 


(b)                                 each Target Group Company
shall take all reasonable steps to preserve and protect its assets;


 


(c)                                  the Purchaser’s
representatives shall be allowed, upon reasonable notice and during normal
business hours, access to the books and records of each Target Group Company
(including, without limitation, all statutory books, minute books, leases,
contracts, supplier lists and customer lists) together with the right to take
copies;


 


(d)                                 no Target Group Company shall
do, allow or procure any act or omission which would constitute or give rise to
a breach of any Warranty as if the Warranties were to be repeated on or at any
time before Completion by reference to the facts and circumstances then
existing;


 

















 


(e)                                  prompt disclosure is made to
the Purchaser of all relevant information which comes to the notice of the
Vendor in relation to any fact or matter (whether existing on or before the
date of this Agreement or arising afterwards) which may constitute a breach of
any Warranty as if the Warranties were to be repeated on or at any time before
Completion by reference to the facts and circumstances then existing;


 


(f)                                    no dividend or other
distribution shall be declared, paid or made by any Target Group Company;


 


(g)                                 no share or loan capital shall
be allotted or issued or agreed to be allotted or issued by any Target Group
Company;


 


(h)                                 all transactions between each
Target Group Company and each Vendor Group Company shall be on arm’s length
commercial terms and in their respective ordinary and usual course of business;


 


(i)                                     the amount of any Indebtedness
owed by each Target Group Company or existing as at the date of this Agreement
shall not be increased or extended and no new Indebtedness shall be entered
into or assumed by any such company; and


 


(j)                                     no action is taken by any
Target Group Company or any Vendor Group Company which is inconsistent with the
provisions of this Agreement or the consummation of the transactions
contemplated by this Agreement.


 


4.2           Pending Completion, the Vendor shall
procure that the Target Group Companies consult fully with the Purchaser in
relation to any matters which may have a material effect upon the Target Group
Companies.  Without the prior written
consent of the Purchaser, the Target Group Companies shall not, and the Vendor
shall ensure that the Target Group Companies do not:


 


(a)                                  enter into any contract or
commitment (or make a bid or offer which may lead to a contract or commitment)
having a material value or involving material expenditure or which is of a long
term or unusual nature or which could involve an obligation of a material
nature or which may result in any material change in the nature or scope of the
operations of such Target Group Company;


 


(b)                                 agree to any variation or
termination of any existing contract to which that Target Group Company is a
party and which may have a material effect upon the nature or scope of the
operations of such Target Group Company;


 


(c)                                  (whether in the ordinary and
usual course of business or otherwise) acquire or dispose of, or agree to
acquire or dispose of, any material business or any material asset; or


 


(d)                                 enter into any agreement,
contract, arrangement or transaction (whether or not legally binding) other
than in the ordinary and usual course of business.


 


COMPLETION


 


5.1           The sale and purchase of the Target
Shares shall be completed at 75th Floor, The Centre, 99 Queen’s Road
Central, Hong Kong on such date as may be agreed between the Vendor and the
Purchaser following notification by the Purchaser to the Vendor of the
fulfilment to the satisfaction of the Purchaser (or waiver) of all the
Conditions Precedent.  The events
referred to in the following provisions of this clause 5 shall take place
on Completion.


 


5.2           The Vendor shall deliver (or cause to
be delivered) to the Purchaser:


 


(a)                                  duly executed transfers into
the name of the Purchaser or its nominee in respect of all of the Target
Shares, together with the related share certificates;


 

















 


(b)                                 the certificates of
incorporation, common seal, share register, share certificate book (with any
unissued share certificates), business licence, the documents evidencing the
Regulatory Approvals (as the case may be) and all minute books and other
statutory books (which shall be written-up to but not including Completion) of
each Target Group Company;


 


(c)                                  all such other documents
(including any necessary waivers of pre-emption rights or other consents) as
may be required to enable the Purchaser and/or its nominee to be registered as
the holder(s) of the Target Shares;


 


(d)                                 a counterpart of the Tax
Indemnity duly executed by the Vendor;


 


(e)                                  a copy of a resolution of the
board of directors (certified by a duly appointed officer as true and correct)
of:


 


(i)             the Vendor, authorising the execution of and the
performance by the Vendor of its obligations under this Agreement and each of
the other documents to be executed by the Vendor (including the Tax Indemnity);


 


(ii)          each Vendor Group Company, authorising the execution
of and the performance by the relevant company of its obligations under each of
the Connected Transactions to which it is a party;


 


(f)                                    a copy of the sale and
purchase agreement pursuant to which the entire issued share capital of the
Target Holding Company was transferred to the Vendor;


 


(g)                                 a legal opinion from Commerce
& Finance, PRC counsel, in form and substance acceptable to the Purchaser;
and


 


(h)                                 a legal opinion from Conyers,
Dill & Pearman, in form and substance acceptable to the Purchaser.


 


5.3           The Vendor shall procure that
resolutions of the board of directors of the Target Holding Company are passed
to approve the registration of the transfers in respect of the Target Shares
referred to in clause 5.2.


 


5.4           The Purchaser shall:


 


(a)                                  in satisfaction of its
obligations under clause 2.2, cause the sum set out in clause 2.2 to
be paid (i) by electronic funds transfer (or such other modes of payment as may
be agreed between the Vendor and the Purchaser) to the Vendor’s bank account,
or if so directed by the Vendor, to its nominee’s bank account, details of
which shall be notified in writing to the Purchaser at least two Business Days
prior to Completion or (ii) as otherwise directed by the Vendor; and


 


(b)                                 deliver to the Vendor a copy
of the minutes (certified by a duly appointed officer as true and correct) of
the Purchaser authorising the execution and performance by the Purchaser of its
obligations under this Agreement, the Tax Indemnity and each of the Connected
Transactions to which it is a party.


 


Any payment made
in accordance with clause 5.4(a) shall constitute a good discharge by the
Purchaser of its obligations under clause 2.2 and the Purchaser shall not
be concerned to see that the funds are applied in payment to the Vendor.


 


5.5           If the Vendor fails or is unable to
perform any material obligation required to be performed by the Vendor pursuant
to clauses 3.2, 5.2 and 5.3, respectively, by the last date on which
Completion is required to occur, the Purchaser shall not be obliged to complete
the sale and purchase of the Target Shares and may, in its absolute discretion,
by written notice to the Vendor:


 


(a)                                  rescind this Agreement without
liability on the part of the Purchaser; or


 

















 


(b)                                 elect to complete this
Agreement on that date, to the extent that the Vendor is ready, able and
willing to do so, and specify a later date on which the Vendor shall be obliged
to complete the outstanding obligations of the Vendor; or


 


(c)                                  elect to defer the Completion
by not more than 90 days to such other date as it may specify in such notice,
in which event the provisions of this clause 5.5 shall apply, mutatis
mutandis, if the Vendor fails or is unable to perform any such obligations on
such other date.


 


POST-COMPLETION
UNDERTAKINGS;
RESTRICTIONS ON VENDOR GROUP COMPANIES


 


6.1           Following Completion, the Vendor
undertakes to the Purchaser to use all reasonable endeavours to obtain the
release of each Target Group Company from any Intra-Group Guarantees to which
it is a party and, pending such release, to indemnify the relevant Target Group
Company against all amounts paid by it to any third party pursuant to any such
Intra-Group Guarantee in respect of any liability of any Vendor Group Company
(and all Costs incurred in connection with such liability) whether arising
before or after Completion.


 


6.2           Following Completion, the Purchaser
undertakes to the Vendor to use all reasonable endeavours to obtain the release
of each Vendor Group Company from any Intra-Group Guarantees to which it is a
party and, pending such release, to indemnify the relevant Vendor Group Company
against all amounts paid by it to any third party pursuant to any Intra-Group
Guarantees in respect of any liability of any Target Group Company (and all
Costs incurred in connection with such liability) whether arising before or
after Completion.


 


6.3 (a)                The Vendor shall not and shall cause that
each other Vendor Group Company  shall not (whether alone or jointly with another and
whether directly or indirectly) carry on or be engaged or (except as the owner
for investment of securities dealt in on a stock exchange and not exceeding 5
per cent. in nominal value of the securities of that class) be interested
economically or otherwise in any manner whatsoever in any Competing Business
during the Relevant Period.


 


(b)                                 The Vendor shall not and shall
cause that each other Vendor Group Company shall not during the Relevant
Period, directly or indirectly, solicit or endeavour to entice away from the
Target Group Companies, offer employment to or employ, or offer or conclude any
contract for services with, any person who was employed in skilled or
managerial work in the Target Company’s business at any time during the 1 year
prior to Completion.


 


(c)                                  Except so far as may be
required by law and in such circumstances only after prior consultation with
the Purchaser, the Vendor shall not (and shall cause that each other Vendor
Group Companies shall not) at any time disclose to any person or use to the
detriment of the Target Company’s business any trade secret or other
confidential information of a technical character which it holds in relation to
the Target Company’s business.


 


(d)                                 The Vendor (acting for itself
and each other Vendor Group Company) acknowledges and agrees that the duration,
extent and application of the respective restrictions in clauses (a), (b)
and (c) are no greater than is reasonable and necessary for the protection of
the interests of the Purchaser but that, if any such restriction shall be
adjudged by any court of competent jurisdiction to be void or unenforceable but
would be valid if part of the wording thereof was deleted and/or the period
thereof was reduced and/or the area dealt with thereby was reduced, the said
restriction shall apply within the jurisdiction of that court with such
modifications as may be necessary to make it valid and effective.


 


WARRANTIES


 


7.1           The Vendor represents, warrants and
undertakes to the Purchaser in the terms of the Warranties and acknowledges
that the Purchaser has entered into this Agreement in reliance upon the
Warranties.


 

















 


7.2           The Vendor undertakes (without
limiting any other rights of the Purchaser in any way including its rights to
damages in respect of a claim for breach of any Warranty on any other basis)
that it shall pay in cash to the Purchaser (or, if so directed by the
Purchaser, to the Target Group Company in question) (each an Indemnified Person)
by way of indemnity on demand in the case of a breach of any of the Warranties,
a sum equal to the aggregate of (i) the amount which, if received by the
Indemnified Person, would be necessary to put that Indemnified Person into the
financial position which would have existed had there been no breach of the
Warranty in question; and (ii) all Costs suffered or incurred by the
Indemnified Person, directly or indirectly, as a result of or in connection
with such breach of Warranty.


 


7.3           The Vendor agrees to waive the
benefit of all rights (if any) which the Vendor may have against any Target
Group Company, or any present or former officer or employee of any such
company, on whom the Vendor may have relied in agreeing to any term of this
Agreement and each of the Vendor undertakes not to make any claim in respect of
such reliance.


 


7.4           Each of the Warranties shall be
construed as a separate Warranty and (save as expressly provided to the
contrary) shall not be limited or restricted by reference to or inference from
the terms of any other Warranty or any other term of this Agreement.


 


7.5           The Warranties shall be deemed to be
repeated immediately before Completion with reference to the facts and
circumstances then existing.


 


7.6           The Vendor undertakes to notify the
Purchaser in writing promptly if it becomes aware of any circumstance arising
after the date of this Agreement which would cause any Warranty (if the
Warranties were repeated with reference to the facts and circumstances then
existing) to become untrue or inaccurate or misleading in any respect which is
material to the financial or trading position of any of the Target Group
Companies.


 


LIMITATIONS
ON CLAIMS


 


8.1           The aggregate amount of the liability
of the Vendor for all Claims shall not exceed the Total Price.


 


8.2           None of the limitations contained in
clause 8.1 shall apply to any breach of any Warranty which (or the delay
in discovery of which) is the consequence of dishonest, deliberate or reckless
mis-statement, concealment or other conduct by any Vendor Group Company or any
officer or employee, or former officer or employee, of any Vendor Group
Company.


 


PURCHASER’S
RIGHTS TO RESCISSION


 


9.             The Purchaser may by written notice
given to the Vendor at any time prior to Completion rescind this Agreement
without liability on the part of the Purchaser:


 


(a)                                  if any fact, matter or event
(whether existing or occurring on or before the date of this Agreement or
arising or occurring afterwards) comes to the notice of the Purchaser at any
time prior to Completion which:


 


(i)             constitutes a breach by the Vendor of this Agreement
(including, without limitation, any breach of the pre-Completion undertakings
in clause 4); or


 


(ii)          would constitute a breach of any Warranty if the
Warranties are repeated on or at any time before Completion by reference to the
facts and circumstances then existing; or


 


(iii)       affects or is likely to affect in a materially adverse manner the
business, financial position or prospects of the Target Group Companies taken
as a whole; or


 


(b)                                 if at any time after signing
of this Agreement and before Completion there is a material adverse change in
the market price of the shares of the Company and the Company is of the


 

















 


opinion
that it will not be in the interests of its shareholders as a whole to proceed
with the acquisition of the Target Shares.


 


WITHHOLDING
TAX AND GROSSING UP


 


10.1         The Vendor shall pay all sums payable
by it under clauses 6.1 and 7 free and clear of all deductions or
withholdings unless the law requires a deduction or withholding.  If a deduction or withholding is so required
the Vendor shall pay such additional amount as will ensure that the net amount
the payee receives equals the full amount which it would have received had the
deduction or withholding not been required.


 


10.2         If any tax authority brings any sum
paid by the Vendor under or pursuant to clauses 6.1 and 7 into charge to
tax, then the Vendor shall pay such additional amount as will ensure that the
total amount paid, less the tax chargeable on such amount, is equal to the
amount that would otherwise be payable under clauses 6.1 and 7.


 


ENTIRE
AGREEMENT


 


11.           This Agreement and the Tax Indemnity
constitute the entire agreement and understanding between the parties in
connection with the sale and purchase of the Target Shares.  This Agreement and the Tax Indemnity supersede
all prior agreements or understandings in connection with the subject matter
hereof which shall cease to have any further force or effect.  No party has entered into this Agreement in
reliance upon any representation, warranty or undertaking which is not set out
or referred to in this Agreement and the Tax Indemnity.


 


VARIATION


 


12.1         No variation of this Agreement (or of
any of the legally binding agreements referred to in this Agreement) shall be
valid unless it is in writing and signed by or on behalf of each of the parties
to it.  The expression “variation” shall
include any variation, supplement, deletion or replacement however effected.


 


12.2         Unless expressly agreed, no variation
shall constitute a general waiver of any provisions of this Agreement, nor
shall it affect any rights, obligations or liabilities under or pursuant to
this Agreement which have already accrued up to the date of variation, and the
rights and obligations of the parties under or pursuant to this Agreement shall
remain in full force and effect, except and only to the extent that they are so
varied.


 


ASSIGNMENT


 


13.           The Vendor shall not assign,
transfer, charge or otherwise deal with all or any of its rights under this
Agreement nor grant, declare, create or dispose of any right or interest in it
without the prior written consent of the Purchaser. Any purported assignment in
contravention of this clause 13 shall be void.


 


ANNOUNCEMENTS


 


14.1         Except as required by law or by any
stock exchange or governmental or other regulatory or supervisory body or
authority of competent jurisdiction to whose rules the party making the
announcement or disclosure is subject, whether or not having the force of law,
no announcement or circular or disclosure in connection with the existence or
subject matter of this Agreement shall be made or issued by or on behalf of any
of the Vendor Group Companies without the prior written approval of the
Purchaser (such approval not to be unreasonably withheld or delayed), or by or
on behalf of the Purchaser without the prior written approval of the Vendor
Group Companies (such approval not to be unreasonably withheld or delayed).


 


14.2         Where any announcement or disclosure is
made in reliance on the exception in clause 14.1, the party making the
announcement or disclosure will so far as practicable consult with the other


 

















 


parties in advance
as to the form, content and timing of the announcement or disclosure.


 


COSTS


 


15.           Each party shall bear its own Costs
incurred in connection with the negotiation, preparation and completion of this
Agreement.


 


CONFIDENTIALITY


 


16.           The Vendor undertakes with the
Purchaser that it shall keep confidential (and to ensure that its directors,
officers, employees, agents and professional and other advisers keep
confidential) any information in its possession (whether before or after the
date of this Agreement):


 


(a)                                  in relation to the
subscribers, business, assets or affairs of the Target Group Companies
(including any data held by the Target Group Companies); or


 


(b)                                 which relates to the contents
of this Agreement (or any agreement or arrangement entered into pursuant to
this Agreement),


 


provided that the
undertakings contained in this clause 16 shall not apply to any
information which is in or has entered the public domain otherwise than as a
result of an announcement or disclosure by the Vendor Group Companies in breach
of clause 14 or by their respective directors, officers, employees, agents and
professional and other advisers.


 


The Vendor shall
not use for its own business purposes or disclose to any third party any such
information without the consent of the Purchaser.


 


SEVERABILITY


 


17.           If any provision of this Agreement is
held to be invalid or unenforceable, then such provision shall (so far as it is
invalid or unenforceable) be given no effect and shall be deemed not to be
included in this Agreement but without invalidating any of the remaining
provisions of this Agreement.  The
parties shall then use all reasonable endeavours to replace the invalid or
unenforceable provisions by a valid and enforceable substitute provision the
effect of which is as close as possible to the intended effect of the invalid
or unenforceable provision.


 


COUNTERPARTS


 


18.           This Agreement may be executed in any
number of counterparts and by the parties to it on separate counterparts, each
of which is an original but all of which together constitute one and the same
instrument.


 


WAIVER


 


19.1         No failure or delay by any parties
hereto in exercising any right or remedy provided by law under or pursuant to
this Agreement shall impair such right or remedy or operate or be construed as
a waiver or variation of it or preclude its exercise at any subsequent time and
no single or partial exercise of any such right or remedy shall preclude any
other or further exercise of it or the exercise of any other right or remedy.


 


19.2         The rights and remedies of the parties
hereto under or pursuant to this Agreement are cumulative, may be exercised as
often as such party considers appropriate and are in addition to its rights and
remedies under general law.


 


FURTHER
ASSURANCE


 


20.           The Vendor agrees to perform (or
procure the performance of) all further acts and things, and execute and
deliver (or procure the execution and delivery of) such further documents, as
may be


 

















 


required by law or
as the Purchaser may reasonably require, whether on or after Completion, to
implement and/or give effect to this Agreement and the transaction contemplated
by it and for the purpose of vesting in the Purchaser the full benefit of the assets,
rights and benefits to be transferred to the Purchaser under this Agreement.


 


NOTICES


 


21.1         Any notice or other communication to be
given by one party to any other party under, or in connection with, this
Agreement shall be in writing and signed by or on behalf of the party giving
it.  It shall be served by sending it by
fax to the number set out in clause 21.2, or delivering it by hand, or
sending it by pre-paid recorded delivery or registered post, to the address set
out in clause 21.2 and in each case marked for the attention of the
relevant party set out in clause 21.2 (or as otherwise notified from time
to time in accordance with the provisions of this clause 21).  Any notice so served by hand, fax or post
shall be deemed to have been duly given:


 


(a)                                  in the case of delivery by
hand, when delivered;


 


(b)                                 in the case of fax, upon
confirmation of transmission;


 


(c)                                  in the case of prepaid
recorded delivery or registered post, at 10a.m. on the fifth Business Day
following the date of posting


 


provided that in
each case where delivery by hand or by fax occurs after 6p.m. on a Business Day
or on a day which is not a Business Day, service shall be deemed to occur at
9a.m. on the next following Business Day.


 


References to time
in this clause are to local time in the country of the addressee.


 


21.2         The addresses and fax numbers of the
parties for the purpose of clause 21.1 are as follows:


 


The Vendor:


 


	
  Address:

  	
   

  	
  Craigmuir
  Chambers,

  P.O. Box 71,

  Road Town,

  Tortola,

  British Virgin Islands

  
	
   

  	
   

  	
   

  
	
  Fax:

  	
   

  	
  (852) 2126 2016

  
	
   

  	
   

  	
   

  
	
  For the
  attention of:

  	
   

  	
  The Directors

  



 


The Purchaser:


 


	
  Address:

  	
   

  	
  75th Floor

  The Center,

  99 Queen’s Road Central,

  Hong Kong

  
	
   

  	
   

  	
   

  
	
  Fax:

  	
   

  	
  (852) 2126 2016

  
	
   

  	
   

  	
   

  
	
  For the
  attention of:

  	
   

  	
  The Directors

  



 


21.3         A party may notify any other party to
this Agreement of a change to its name, relevant addressee, address or fax
number for the purposes of this clause 21, provided that, such notice
shall only be effective on:


 


(a)                                  the date specified in the
notice as the date on which the change is to take place; or


 

















 


(b)                                 if no date is specified or the
date specified is less than five Business Days after the date on which notice
is given, the date following five Business Days after notice of any change has
been given.


 


21.4         All notices under or in connection with
this Agreement shall be in the English language.


 


GOVERNING
LAW, JURISDICTION AND
SERVICE OF PROCESS


 


22.1         This Agreement and the relationship
between the parties shall be governed by, and interpreted in accordance with,
the laws of Hong Kong.


 


22.2         The parties agree that the courts of
Hong Kong are to have exclusive jurisdiction to settle any disputes (including
claims for set-off and counterclaims) which may arise in connection with the
creation, validity, effect, interpretation or performance of, or the legal
relationships established by, this Agreement or otherwise arising in connection
with this Agreement, and for such purposes irrevocably submit to the
jurisdiction of the Hong Kong courts.


 


22.3         The Vendor shall at all times maintain
an agent for service of process and any other documents in proceedings in Hong
Kong or any other proceedings in connection with this Agreement.  Such agent shall be China Unicom (Hong Kong)
Group Limited currently of 75th Floor, The Centre, 99 Queen’s Road,
Central, Hong Kong and any writ, judgment or other notice of legal process
shall be sufficiently served on the Vendor if delivered to such agent at its
address for the time being.  The Vendor
undertakes not to revoke the authority of the above agent and if, for any
reason, the Purchaser requests the Vendor to do so it shall promptly appoint
another such agent with an address in Hong Kong and advise the Purchaser.  If, following such a request, the Vendor
fails to appoint another agent, the Purchaser shall be entitled to appoint one
on behalf of the Vendor at the expense of the Vendor.


 


AS WITNESS this Agreement has been signed on behalf
of the parties the day and year first before written.


 

















 


SCHEDULE 1


 


DEFINITIONS
AND INTERPRETATION


 


1.             In this Agreement, the following expressions
shall have the following meanings:


 


A Share Company means China United Telecommunications Corporation
Limited;


 


Accounts means in relation to the Target Company:


 


(a)                                  the combined audited balance
sheets of the Target Company as of the relevant Accounts Date in respect of
that financial period; and


 


(b)                                 the combined audited
statements of income, owner’s equity and cash flows of the Target Company for
the financial period ended on the relevant Accounts Date,


 


together with any
notes, reports or statements included in or annexed to them;


 


Accounts Date means 31 December 2002 or 30 June 2003, as the case
may be;


 


Business Day means a day (excluding Saturdays) on which banks in
Hong Kong and the PRC are generally open for the transaction of normal banking
business;


 


Claim means any claim for breach of a Warranty;


 


Companies Ordinance means the Companies Ordinance, Chapter 32 of the Laws
of Hong Kong;


 


Competing Business  means a business which carries on or is
involved with the provision of any mobile telephone (voice and data) and
related value-added services using GSM, CDMA, CDMA1x, WCDMA, 3G technology or
otherwise in the Territory;


 


Completion means completion of the sale and purchase of the
Target Shares under this Agreement;


 


Conditions Precedent means the conditions specified in clause 3.1;


 


Connected Transactions means the Prospective Cellular Connected Transactions
of the A Share Company and the Prospective Cellular Connected Transactions of
the Company;


 


Costs means liabilities, losses, damages, costs (including
legal costs) and expenses (including taxation), in each case of any nature
whatsoever;


 


HK$ means Hong Kong dollars, the lawful currency of Hong
Kong;


 


holding company shall be construed in accordance with section 2 of
the Companies Ordinance;


 


Hong Kong means the Hong Kong Special Administrative Region of
the PRC;


 


Indebtedness means any indebtedness in respect of all obligations
to repay borrowed money, all indebtedness evidenced by notes, bonds, loan
stock, debentures or similar obligations, acceptances or documentary credit
facilities, all rental obligations under finance leases, and hire purchase
contracts, any other transaction having the commercial effect of a borrowing or
raising of money, the net amount of any liability under any swap, hedging or
other similar treasury instrument, and all guarantees, sureties, indemnities,
counter-indemnities or letters of comfort of obligations of others of the
foregoing types;


 


Intellectual Property Rights means patents, trade marks, service
marks, trade names, design rights, copyright (including rights in computer
software), rights in know-how and other intellectual property rights, in each
case whether registered or unregistered and including applications for the
grant of any


 

















 


such rights and all
rights or forms of protection having equivalent or similar effect anywhere in
the world;


 


Intra-Group Guarantees means all guarantees, indemnities,
counter-indemnities and letters of comfort of any nature whatsoever (a) given
to any third party by the Target Group Company in respect of a liability of any
Vendor Group Company; and/or (as the context may require) (b) given to any
third party by any Vendor Group Company in respect of a liability of the Target
Group Company;


 


Intra-Group Loans means all debts outstanding between any Target Group
Company and any Vendor Group Company;


 


Last Accounts means the Accounts of the Target Company in respect
of the financial period ended on the Last Accounts Date;


 


Last Accounts Date means 30 June 2003;


 


Leased Properties means the properties currently leased by the Target
Company as tenant;


 


Mainland China
means the PRC excluding Hong Kong and the Macau Special Administrative Region
of the PRC;


 


PRC means the People’s Republic of China;


 


Properties means the properties currently owned by the Target
Company;


 


Prospective Cellular Connected Transactions of the Company means those transactions effected
pursuant to the operating agreements in the agreed forms as listed in Appendix
1;


 


Prospective Cellular Connected Transactions of the A Share
Company  means those transactions effected
pursuant to the operating agreements in the agreed forms as listed in Appendix
2;


 


Regulatory Approvals means the approvals, consents and authorisations from
all relevant regulatory authorities in the PRC (including the State Council,
the State Development and Planning Commission, the Ministry of Information
Industry, the Ministry of Foreign Trade and Economic Cooperation, the Ministry
of Finance and the China Securities Regulatory Commission), Hong Kong
(including the Telecommunications Authority) and the United States of America
(including the Federal Communications Commission) being those necessary to
effect the transactions contemplated by this Agreement;


 


Relevant Period means the period commencing from the date of
Completion and ending on the date on which (i) the shares or the American
Depository Shares of the Purchaser cease to be listed and traded on the New
York Stock Exchange, Hong Kong Stock Exchange and any other stock exchanges or (ii)
Unicom Group ceases to be a controlling shareholder of the Purchaser or an
associate of such controlling shareholder under the Rules Governing the Listing
of Securities on the Stock Exchange of Hong Kong Limited, whichever is the
earlier;


 


Reorganisation
means the acquisitions and transfers described in Recitals (A) to (C);


 


Restructuring Agreements means the agreements listed in Appendix 3;


 


RMB means Renminbi, the lawful currency of the PRC;


 


Schedules means Schedules 1, 2 and 3 to this Agreement and Schedule shall be
construed accordingly;


 


security interest means any security interest of any nature whatsoever
including, without limitation, any mortgage, charge, pledge, lien, assignment
by way of security or other encumbrance, options, equities, claims or other
third party rights (including rights of pre-emption) of any nature whatsoever,
together with all rights attaching to them;


 

















 


subsidiary and subsidiaries shall be construed in accordance with
section 2 of the Companies Ordinance;


 


Target Company Shares means all the issued shares in the capital of the
Target Company, details of which are set out in Part C of Schedule 2;


 


Target Group Companies means the Target Holding Company and/or the Target
Company;


 


Target Shares means all the issued shares in the capital of the
Target Holding Company, details of which are set out in Part B of
Schedule 2;


 


Tax Indemnity means the Tax Indemnity in the agreed form to be
entered into by the Vendor in favour of the Purchaser;


 


Tax Warranties means the warranties set out in paragraphs 1.1
to 1.9 in Part B of Schedule 3;


 


Unicom Group means China United Telecommunications Corporation;


 


Vendor Group Company means Unicom Group, any subsidiary from time to time
of Unicom Group (but excluding the Purchaser, the subsidiaries of the Purchaser
from time to time and the Target Group Companies); and


 


Warranties means the representations and warranties set out in
Schedule 3.


 


2.             In this Agreement, unless the
context otherwise requires:


 


(a)                                  any references to the Target Company shall
include any predecessor entity or person carrying on the business of such
Target Company, whether before or after the Reorganisation;


 


(b)                                 references to persons shall include
individuals, bodies corporate (wherever incorporated), unincorporated associations
and partnerships;


 


(c)                                  the headings are inserted for convenience only
and shall not affect the construction of this Agreement;


 


(d)                                 any reference to an enactment or
statutory provision is a reference to it as it may have been, or may from time
to time be, amended, modified, consolidated or re-enacted;


 


(e)                                  any statement qualified by the
expression to the best knowledge
of the Vendor or so far as the Vendor is aware or any similar expression
shall be deemed to include an additional statement that it has been made after
due and careful enquiry and shall be deemed also to include the best of the
knowledge of each Vendor Group Company;


 


(f)                                    any reference to a document in the agreed form is
to the form of the relevant document agreed between the parties and for the
purpose of identification initialled by each of them or on their behalf (in
each case with such amendments as may be agreed by or on behalf of the Vendor
and the Purchaser);


 


(g)                                 references to any Hong Kong
legal term for any action, remedy, method of judicial proceeding, legal
document, legal status, court, official or any other legal concept shall, in
respect of any jurisdiction other than Hong Kong, be deemed to include the
legal concept which most nearly approximates in that jurisdiction to the Hong
Kong legal term.


 


3.             The Schedules and Appendices
comprise schedules and appendices to this Agreement and form part of this
Agreement.


 

















 


SCHEDULE 2


 


CORPORATE
STRUCTURE PRIOR TO COMPLETION


 


PART A


 


Corporate Structure


 





 

















 


PART B


 


Details of the Target
Holding Company


 


UNICOM NEW WORLD (BVI) LIMITED


 


	
  1.

  	
  Name:

  	
   

  	
  Unicom New World
  (BVI) Limited

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Date of Incorporation:

  	
   

  	
  5 November 2003

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Place of Incorporation:

  	
   

  	
  British Virgin
  Islands

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Class of Company:

  	
   

  	
  International
  Business Company

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Registered Number:

  	
   

  	
  566613

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Registered Office:

  	
   

  	
  Romasco Place

  Wickhams Cay 1

  P.O. Box 3140

  Road Town, Tortola

  British Virgin Islands

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Directors:

  	
   

  	
  Wang Jianzhou,
  Shi Cuiming, William Lo Wing Yan and Ye Fengping

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Registered Shareholders:

  	
   

  	
  China Unicom
  (BVI) Limited

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Authorised Capital:

  	
   

  	
  HK$11,000
  divided into 11,000 shares of HK$1.00 each

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  Issued Capital:

  	
   

  	
  1,000 shares of
  HK$1.00 each

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  Subsidiary:

  	
   

  	
  Unicom New World
  Telecommunications Corporation Limited

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  Mortgages and Charges:

  	
   

  	
  None

  



 

















 


PART C


Details of the Target
Company


 


 


UNICOM NEW WORLD PRC


 


	
  1.

  	
   

  	
  Name:

  	
   

  	
  Unicom New World
  Telecommunications Corporation Limited

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Place of Incorporation:

  	
   

  	
  Beijing, PRC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Nature of Incorporation:

  	
   

  	
  Wholly
  foreign-owned enterprise

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Scope of Business:

  	
   

  	
  Mobile
  telecommunication businesses in Shanxi, Hunan, Hainan,
  Yunnan, Gansu and Qinghai provinces and Inner Mongolia, Ningxia Hui and
  Xizang autonomous
  regions

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Registered Office:

  	
   

  	
  Room 1009, 10th
  Floor, Tower 1, Henderson Centre, 18 Jianguomen Nei Dajie, Beijing, PRC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Registered Capital:

  	
   

  	
  RMB2,054,769,700

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Total Investment:

  	
   

  	
  RMB2,054,769,700

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Equity Holder:

  	
   

  	
  Unicom New World
  (BVI) Limited

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Tax Residence:

  	
   

  	
  Beijing, PRC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  Subsidiaries:

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  Mortgages and Charges:

  	
   

  	
  None

  



 

















 


SCHEDULE 3


 


THE
WARRANTIES


 


Part A: General


 


INFORMATION


 


1.1           All information relating to the
Target Group Companies provided to the Purchaser or its representatives and
advisers for the purposes of preparation of the Accounts is true, accurate and
not misleading and does not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading.


 


1.2           Save as already disclosed in writing
to the Purchaser, there are no other facts or matters which might reasonably be
expected to have a material adverse effect on the financial or trading position
or prospects of any Target Group Company.


 


CORPORATE MATTERS


 


The Target Group Companies


 


2.1(a)                   All of the Target Shares are fully-paid or
properly credited as fully-paid and the Vendor is the sole legal and beneficial
owner of them free from all security interests.


 


(b)                                 The information in respect of
the Target Holding Company set out in Part B of Schedule 2 is true and
accurate and not misleading.


 


(c)                                  The Target Holding Company has
been duly incorporated and is validly existing under the laws of the BVI, with
legal right, power and authority (corporate and other) to own, use, lease and
operate its properties and conduct its business in the manner presently
conducted, and is duly qualified to transact business in any jurisdiction in
which it owns or leases properties or conducts any business and such
qualification is required, or is subject to no material liability or disability
by reason of the failure to be so qualified in any such jurisdiction; the
Memorandum of Association and Articles of Association of the Target Holding
Company comply with the requirements of applicable BVI law and are in full
force and effect.


 


2.2(a)                   The Target Holding Company is the sole
legal and beneficial owner of the entire equity interests in the Target Company
free from all security interests.


 


(b)                                 The information in respect of
each of the Target Company set out in Part C of Schedule 2 is true and
accurate.


 


(c)                                  The Target Company is
currently a domestic enterprise with limited liability and has been duly
organised and is validly existing under the laws of the PRC, and its business
licence is in full force and effect; its Articles of Association comply with
the requirements of applicable PRC law and are in full force and effect; it has
all consents, approvals, authorizations, orders, registrations, clearances and
qualifications of or with any court, governmental agency or body having
jurisdiction over it or any of its properties in each jurisdiction in which the
ownership or lease of property by it or the conduct of its business requires
such qualification and has the legal right and authority to own, use, lease and
operate its assets and to conduct its business in the manner presently
conducted.


 


2.3           No Target Group Company owns or has
any interest of any nature whatsoever in any shares, debentures or other
securities issued by any undertaking other than, in respect of the Target
Holding Company, its equity interests in the Target Company.


 


2.4           The Target Holding Company does not
carry on any business other than holding the Target Company.


 

















 


The Vendor


 


2.5           The Vendor (the Warrantor) is duly incorporated or
established and is validly existing under the laws of its jurisdiction of
incorporation, with full power and authority to own, lease and operate its
properties and assets and to execute and perform its obligations under this
Agreement.


 


2.6           The execution, delivery and
performance by the Warrantor of this Agreement has been duly authorised by it
and this Agreement constitutes a legal, valid and binding obligation of such
Warrantor enforceable in accordance with its terms, subject to the laws of
bankruptcy and other similar laws affecting the rights of creditors generally.


 


2.7           All regulatory, corporate and other
approvals (including Regulatory Approvals and shareholder approvals) and
authorisations required by the Warrantor for the execution and delivery of this
Agreement and any agreement or instrument contemplated hereby, the performance
of the terms hereof and thereof and the sale of the Target Shares have been
obtained, are unconditional and are in full force and effect.


 


2.8           The execution and delivery by the
Warrantor of this Agreement, and the performance and completion of the
transactions herein contemplated: (a) will not infringe any applicable
laws or regulations; (b) will not result in any breach of the terms of, or
constitute a default under, its constitutional documents and business licence
(as applicable) or any instrument, agreement or governmental, regulatory or
other judgement, decree or order to which the Warrantor is a party or by which
it or its property is bound; and (c) will not conflict with any of the
certificates, licences or permits of the Warrantor that enable it to carry on
the business or operations now operated by it.


 


2.9           The Warrantor is not: (a) in breach
of the terms of, or in default under, any instrument, agreement or order to
which it is a party or by which it or its property is bound to an extent which
is material in the context of the transactions herein contemplated;
(b) involved in or the subject of any current or pending investigation or
proceedings (whether administrative, regulatory or otherwise), whether in the
PRC, Hong Kong  or elsewhere.


 


FINANCIAL MATTERS


 


Accounts


 


3.1(a)                   The Accounts give a true and fair view of
the state of affairs and financial results of the Target Company for the
periods and as at the dates stated therein.


 


(b)                                 Without limiting the
generality of paragraph (a):


 


(i)             the Accounts of the Target Company either make full
provision for or disclose all liabilities (whether actual, contingent or
disputed and including financial lease commitments and pension liabilities),
all outstanding capital commitments and all bad or doubtful debts of the Target
Company as at the Accounts Dates, in each case in accordance with applicable
accounting principles;


 


(ii)          the Accounts of the Target Company for each of the
periods ended on the Accounts Date were prepared under the historical
convention, complied with the requirements of all relevant laws and regulations
then in force and with all statements of standard accounting practice (or
financial reporting standards) and applicable accounting principles then in
force;


 


(iii)       the rate of depreciation adopted by the Target Company in its Accounts
for each of the periods ended on the Accounts Dates was sufficient for each of
the fixed assets of the Target Company to be written down to nil by the end of
its useful life;


 


(iv)      except as stated in its Accounts, no changes in the accounting policies
were made by any of the Target Company in any of the periods ended on the
Accounts Dates;


 

















 


(v)         the results shown by the Accounts of the Target
Company for each of the periods ended on the Accounts Dates were not (except as
therein disclosed) affected by any extraordinary or exceptional item or by any
other factor rendering such results for all or any of such periods unusually
high or low.


 


3.2           None of the financial information
provided to the Purchaser or its representatives and advisers is misleading in
any material respect nor materially over-state the value of the assets nor
materially under-state the liabilities of the Target Company as at the dates to
which they were drawn up and do not materially over-state the profits of the
Target Company in respect of the periods to which they relate.


 


Position since Last Accounts Date


 


3.3(a)                   Since the Last Accounts Date and compared
to the Last Accounts, there has been no material adverse change in the
financial or trading position or (save to the extent that the same would be
likely to affect to a similar extent generally all companies carrying on
similar businesses) in the prospects of the Target Company and no event, fact
or matter has occurred which is likely to give rise to any such change.


 


(b)                                 Since the Last Accounts Date
and compared to the Last Accounts:


 


(i)                       the business of the Target
Company has been carried on in the ordinary and usual course and the Target
Company has not made or agreed to make any payment other than routine payments
in the ordinary and usual course of trading;


 


(ii)                    no dividend or other distribution has been
declared, paid or made by the Target Company;


 


(iii)                 there has been no material change in the
level of borrowing or in the working capital requirements of the Target Company
(except for changes of not more than 10% arising from expenditure of a capital
nature which has been budgeted or otherwise provided for in the Target
Company’s approved business plan);


 


(iv)                all transactions between the Target Company
and any Vendor Group Company have been on an arm’s length basis and commercial
terms;


 


(v)                   save for the Restructuring Agreements and
the Connected Transactions, no contract, liability or commitment (whether in
respect of capital expenditure or otherwise) has been entered into by the
Target Company which is of a long term or unusual nature or which involved or
could involve an obligation of a material nature or magnitude;


 


(vi)                save as provided in the Restructuring
Agreements, the Target Company has not (whether in the ordinary and usual
course of business or otherwise) acquired or disposed of, or agreed to acquire
or dispose of, any material business or any material asset having a value in
excess of RMB4 billion;


 


(vii)             no material debtor has been released by the
Target Company on terms that it pays less than the book value of its debt and
no material debt owing to the Target Company has been deferred, subordinated or
written off or has proved to any extent irrecoverable;


 


(viii)          no change has been made in terms of
employment and any benefits in kind payable to employees and other employment
related matters by the Target Company or any Vendor Group Company (other than
those required by law) which could materially increase the total costs
attributable to employment and employee benefits of the Target Company;


 

















 


(ix)                  there has been no material increase or
decrease in the levels of trade debtors or creditors or in the average
collection or payment periods for the trade debtors and creditors respectively;


 


(x)                     the Target Company has not repaid any
material borrowing or indebtedness in advance of its stated maturity;


 


(xi)                  there has been no material reduction in the
cash balances of the Target Company;


 


(xii)               no resolution of the members
of the Target Company has been passed whether in general meeting or otherwise
(other than resolutions relating to the routine business of annual general
meetings); and


 


(xiii)            the business of the Target Company has not
been affected by any abnormal factor not affecting to a similar extent
generally all companies carrying on similar businesses.


 


Working Capital


 


3.4           Having regard to existing bank and
other financial facilities, the Target Company has sufficient working capital
available to it as at the date of this Agreement to enable it to continue to
carry on its business in its present form and at its present level of turnover
and for the purpose of performing in accordance with their terms all orders,
projects and other obligations and discharging all liabilities which ought
properly to be discharged during the period of 12 months after Completion.


 


Accounting and other Records


 


3.5(a)                   The books of account and other records of
the Target Company:


 


(i)                       are up-to-date and have been
maintained in accordance with all applicable laws and generally accepted
accounting practices on a proper and consistent basis;


 


(ii)                    comprise complete and accurate records of
all information required to be recorded therein;


 


(iii)                 are in its possession or under its control
together with all documents of title and executed copies of all existing
agreements to which the Target Company is a party.


 


(b)                                 All accounts, documents and
returns required by law to be delivered or made by the Target Company to any
government authority or regulatory body or any other authority have been duly
and correctly delivered or made.


 


DEBT POSITION


 


Debts owed to the Target Company


 


4.1(a)                   There are no debts owing to the Target
Company other than:


 


(i)                                     the Intra-Group Loans; and


 


(ii)                                  other trade debts incurred in the ordinary
and usual course of business which do not exceed RMB600 million in aggregate for
the Target Company as a whole.


 


(b)                                 The book debts shown in the
Last Accounts of the Target Company have realised, or will realise within a
period of six months from the Last Accounts Date, their nominal amount less any
specific provision for bad or doubtful debts included in such accounts. The
book debts incurred by the Target Company since the Last Accounts Date and
which are outstanding as at the date of this Agreement will realise within
three months from such date not less than 90% of their nominal amount.


 

















 


Debts owed by the Target Company


 


4.2(a)                   The Target Company does not have
outstanding any borrowing or indebtedness in the nature of borrowing
(including, without limitation, any indebtedness for moneys borrowed or raised
under any acceptance credit, bond, note, bill of exchange or commercial paper,
finance lease, hire purchase agreement, trade bills (other than those on terms
normally obtained), forward sale or purchase agreement or conditional sale
agreement or other transaction having the commercial effect of a borrowing)
other than:


 


(i)                       the Intra-Group Loans; and


 


(ii)                    moneys borrowed from or otherwise owed to
third parties (which do not exceed RMB22 billion in aggregate for the Target
Company as a whole).


 


(b)                                 The Target Company has not received
any notice to repay under any agreement relating to any borrowing or
indebtedness in the nature of borrowing which is repayable on demand.


 


(c)                                  There has not occurred any
event of default or any other event or circumstance which would entitle any person
to call for early repayment under any agreement relating to any borrowing or
indebtedness of the Target Company or to enforce any security given by the
Target Company (or, in either case, any event or circumstance which with the
giving of notice and/or the lapse of time and/or a relevant determination would
constitute such an event or circumstance).


 


REGULATORY MATTERS


 


5.1(a)                   Save as envisaged in the Connected
Transactions, the Target Company has (or will by Completion have) obtained all
licences, permissions, authorisations and consents required for carrying on its
business effectively in the places and in the manner in which such business is
now carried on.


 


(b)                                 The licences, permissions,
authorisations and consents referred to in paragraph (a) are (or will by
Completion be) in full force and effect, not limited in duration or subject to
any unusual or onerous conditions and have been (or will by Completion have
been) complied with in all respects.


 


(c)                                  To the best knowledge of the
Vendor, there are no circumstances which indicate that any of the licences,
permissions, authorisations or consents referred to in paragraph (a) will
or are likely to be revoked or not renewed, in whole or in part, in the
ordinary course of events (whether as a result of the acquisition of the Target
Shares by the Purchaser, the Restructuring or otherwise).


 


5.2(a)                   The Target Company has conducted its
business and corporate affairs in accordance with its business licence and with
all applicable laws and regulations (whether of the PRC, Hong Kong or any other
jurisdiction).


 


(b)                                 The Target Company is not in
default of any order, decree or judgment of any court or any governmental or
regulatory authority (whether of the PRC, Hong Kong or any other jurisdiction).


 


THE REORGANISATION AND
THE ASSETS


 


The Reorganisation


 


6.1(a)                   The assets injected into the Target Company
pursuant to the Reorganisation comprise all the assets necessary for the
carrying on of the business carried on by the Target Company in the manner it
is presently conducted and the liabilities assumed by the Target Company
pursuant


 

















 


to the
Reorganisation represent the only liabilities of the Target Company and are
fully, fairly and accurately provided for in the Accounts.


 


6.2           The events and transactions contemplated
by the Reorganisation do not contravene any provision of applicable law, rule
or regulation and do not contravene the Articles of Association or the business
licence of the Target Company or contravene the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement, note, lease or other agreement or instrument binding upon the Target
Company that, singly or in the aggregate, is material to the Target Company, or
any judgement, rule or regulation, order or decree of any governmental body,
agency or court having jurisdiction over the Target Company and will not result
in the creation or imposition of any lien, charge, encumbrance or other
restriction upon any assets of the Target Company.


 


6.3           Save for the conditions precedent
referred to in clauses 3.1(a) and 3.1(b), all consents, approvals,
authorisations, orders, registrations and qualifications required in the PRC in
connection with the events and transactions contemplated by the Reorganisation have
been (or will by Completion have been) made or unconditionally obtained in
writing (including, without limitation, all PRC Regulatory Approvals and
shareholders’ approval), and no such consent, approval, authorisation, order,
registration or qualification has been withdrawn or is subject to any condition
precedent which has not been fulfilled or performed.


 


6.4           There are no legal or government
proceedings pending against the Target Company in the PRC challenging the
effectiveness or validity of the events and transactions contemplated by the
Reorganisation and, to the best knowledge of the Vendor, no such proceedings
are threatened or contemplated by any governmental agencies in the PRC or
elsewhere.


 


Ownership


 


6.5(a)                   For the purpose of this Warranty 6.5, assets shall not
include the properties disclosed in the Accounts, to which the provisions of
Part B of this Schedule shall apply.


 


(b)                                 Each of the assets included in
the Last Accounts of the Target Company or acquired by it since the Last
Accounts Date (other than assets disposed of in the ordinary course of business
and pursuant to the Reorganisation) is the absolute property of the Target
Company.  Save as disclosed in the Last
Accounts, those assets are not the subject of any security interest, factoring
arrangement, leasing or hiring agreement, hire purchase agreement, conditional
sale or credit sale agreement, agreement for payment on deferred terms or any
similar agreement or arrangement (or any agreement or obligation, including a
conditional obligation, to create or enter into any of the foregoing).


 


Possession and Third Party Facilities


 


6.6(a)                   All of the assets owned by the Target
Company, or in respect of which the Target Company has a right of use, are in
the possession or under the control of the Target Company.


 


(b)                                 Where any assets are used but
not owned by the Target Company or any facilities or services are provided to
the Target Company by any third party, there has not occurred any event of
default or any other event or circumstance which may entitle any third party to
terminate any agreement or licence in respect of the provision of such
facilities or services (or any event or circumstance which with the giving of
notice and/or the lapse of time and/or a relevant determination would constitute
such an event or circumstance).


 


Adequacy of Assets


 


6.7(a)                   The assets of the Target Company and the
facilities and services to which the Target Company has a contractual right
include all rights, properties, assets, facilities and services necessary or desirable
for the carrying on of the business of the Target Company in the manner in
which it is currently carried on.


 

















 


(b)                                 The assets of the Target
Company and the facilities and services to which the Target Company has a
contractual right include all assets, facilities and services necessary to
enable the Target Company to conduct its business after Completion in the same
manner in all material respects as it was conducted immediately prior to the
transfer of such business to the Target Company pursuant to the Reorganisation.


 


(c)                                  Save as otherwise provided in
the Connected Transactions, the Target Company does not depend in any material
respect upon the use of assets owned by, or facilities or services provided by,
any Vendor Group Company.


 


Condition


 


6.8                                 All the plant, machinery,
systems, equipment and vehicles used by the Target Company:


 


(a)                                  are in a good state of repair
and have been regularly and properly maintained in accordance with appropriate
technical specifications, safety regulations and the terms and conditions of
any applicable agreement;


 


(b)                                 are capable of being
efficiently and properly used for the purposes for which they were acquired or
are retained;


 


(c)                                  are not dangerous,
inefficient, obsolete or in need of renewal or replacement.


 


Insurances


 


6.9(a)                   The business, undertakings, properties and
other assets of the Target Company are adequately insured against such risks as
are normally insured by persons carrying on similar businesses in the PRC as
those carried on by the Target Company and such insurances include all the
insurances which the Target Company is required under the terms of any leases
or any contracts in respect of any of its properties to undertake and such
insurances are in full force and effect and there are no circumstances which
could render any of such insurances void or voidable and all due premiums in
respect thereof have (if due) been paid.


 


(b)                                 No claim is outstanding by the
Target Company under any such policy of insurance and, to the best knowledge of
the Vendor, there are no circumstances likely to give rise to such a claim.


 


INTELLECTUAL PROPERTY
RIGHTS


 


Registered Rights


 


7.1(a)                   The Target Company is the sole legal owner
of all Intellectual Property Rights registered or sought to be registered in
any jurisdiction which are held or beneficially owned by the Target Company.


 


(b)                                 No act has been done or
omitted to be done and no event has occurred or is likely to occur which may
render any of such Intellectual Property Rights subject to revocation,
compulsory licence, cancellation or amendment or may prevent the grant or
registration of a valid Intellectual Property Right pursuant to a pending
application.


 


Infringement


 


7.2(a)                   None of the operations of the Target
Company infringe, or are likely to infringe, any rights held by any third party
or involve the unauthorised use of confidential information disclosed to the
Target Company (or any Vendor Group Company) in circumstances which might
entitle a third party to make a claim against the Target Company.


 

















 


(b)                                 No claim has been made by any
third party which alleges any infringing act or process which would fall within
paragraph (a) above or which otherwise disputes the right of the Target
Company to use any Intellectual Property Rights relating to its business and
the Vendor is not aware of any circumstances (including any act or omission to
act) likely to give rise to such a claim.


 


(c)                                  There exists no actual or
threatened infringement by any third party of any Intellectual Property Rights
held or used by the Target Company (including misuse of confidential
information) or any event likely to constitute such an infringement nor has the
Target Company (or any Vendor Group Company) acquiesced in the unauthorised use
by any third party of any such Intellectual Property Rights.


 


Intellectual Property Licences


 


7.3           The Target Company is not in default
under any licence, sub-licence or assignment granted to it in respect of any
Intellectual Property Rights used by the Target Company.


 


Loss of Rights


 


7.4           No Intellectual Property Rights owned
or used by the Target Company and no licence of Intellectual Property Rights of
which the Target Company has the benefit will be lost, or rendered liable to
any right of termination or cessation by any third party, by virtue of the acquisition
by the Purchaser of the Target Shares.


 


Records and Software


 


7.5(a)                   All the accounting records and systems
(including but not limited to computerised accounting systems) of the Target
Company are recorded, stored, maintained or operated or otherwise held by the
Target Company and are not wholly or partly dependent on any facilities or
systems which are not under the exclusive ownership or control of the Target
Company.


 


(b)                                 The Target Company is licensed
to use all software necessary to enable it to continue to use its computerised
records for the foreseeable future in the same manner in which they have been
used prior to the date of this Agreement and does not share any user rights in
respect of such software with any other person.


 


CONTRACTUAL MATTERS


 


Material Contracts


 


8.1           Save for the Restructuring Agreements
and the Connected Transactions, there is not outstanding any agreement or
arrangement to which the Target Company is a party:


 


(a)                                  which, by virtue of the
acquisition of the Target Shares by the Purchaser or other performance of the
terms of this Agreement, will result in:


 


(i)                                     any other party being relieved of any
obligation or becoming entitled to exercise any right (including any right of
termination or any right of pre-emption or other option); or


 


(ii)                                  the Target Company being in default under
any such agreement or arrangement or losing any benefit, right or licence which
it currently enjoys or in a liability or obligation of the Target Company being
created or increased;


 


(b)                                 to which any Vendor Group
Company is a party or in which any Vendor Group Company or any connected person
(as defined under the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited) is interested or from which any such person takes


 

















 


benefit,
whether directly or indirectly, except for a royalty-free Trademark
Sub-Licensing Contract between the Target Company and the A Share Company;


 


(c)                                  entered into otherwise than by
way of a bargain at arm’s length and on commercial terms;


 


(d)                                 which establishes any
guarantee, indemnity, suretyship, form of comfort or support (whether or not
legally binding) given by the Target Company in respect of the obligations or
solvency of any third party;


 


(e)                                  pursuant to which the Target
Company has sold or otherwise disposed of any company or business in
circumstances such that it remains subject to any liability (whether contingent
or otherwise) which is not fully provided for in its Last Accounts;


 


(f)                                    which, upon completion by the
Target Company of its work or the performance of its other obligations under
it, is likely to result in a loss for the Target Company which is not fully
provided for in its Last Accounts or which either is not expected to make a
normal profit margin or involves an abnormal degree of risk;


 


(g)                                 which establishes any joint
venture, consortium, partnership or profit (or loss) sharing agreement or
arrangement to which the Target Company is a party;


 


(h)                                 which involves any power of
attorney given by the Target Company or any other authority which would enable
any person not employed by the Target Company to enter into any contract or
commitment on behalf of the Target Company;


 


(i)                                     which involves or is likely to
involve (i) material expenditure by the Target Company or (ii) material
obligations or restrictions of the Target Company of an unusual or exceptional
nature or magnitude and not in the ordinary and usual course of business;


 


(j)                                     which is a currency and/or
interest rate swap agreement, asset swap, future rate or forward rate
agreement, interest cap, collar and/or floor agreement or other exchange or
rate protection transaction or combination thereof or any option with respect
to any such transaction or any other similar transaction to which the Target
Company is a party;


 


(k)                                  which is any other agreement
or arrangement having or likely to have a material effect on the financial or
trading position or prospects of the Target Company;


 


(l)                                     which is a bid, tender,
proposal or offer which, if accepted, would result in the Target Company
becoming a party to any agreement or arrangement of a kind described in
sub-paragraphs (a) to (k) above.


 


Defaults


 


8.2(a)                   The Target Company is not in default under
any agreement to which it is a party and there are no circumstances likely to
give rise to any such default.


 


(b)                                 No party with whom the Target
Company has entered into any agreement or arrangement is in default under such
agreement or arrangement and there are no circumstances likely to give rise to
any such default.


 


LITIGATION AND INVESTIGATIONS


 


Litigation


 


9.1(a)                   Except as plaintiff in the collection of
debts arising in the ordinary course of business, the Target Company is not a
plaintiff or defendant in or otherwise a party to any litigation, arbitration
or administrative proceedings which are in progress or threatened or pending by
or against or concerning the Target Company or any of its assets.


 

















 


(b)                                 No governmental or official
investigation or inquiry concerning the Target Company is in progress or
pending.


 


(c)                                  The Vendor Group are not aware
of any circumstances which are likely to give rise to any such proceeding,
investigation or inquiry as is referred to in paragraph (a) or
paragraph (b).


 


DIRECTORS AND EMPLOYEES


 


Employees


 


10.1         The Target Company has not entered into
any arrangements regarding any future variation in any contract of employment
in respect of any of its directors and employees or any agreement imposing an
obligation on the Target Company to increase the basis and/or rates of
remuneration and/or the provision of other benefits in kind to or on behalf of
any of its directors or employees at any future date.


 


Compliance


 


10.2         The Target Company has in relation to
each of its employees (and so far as relevant to each of its former employees)
complied in all material respects with all statutes, regulations, codes of
conduct, collective agreements, terms and conditions of employment, orders and
awards relevant to their conditions of service or to the relations between it
and its employees (or former employees, as the case may be) or any recognised
trade union.


 


Incentive Schemes


 


10.3         The Target Company does not have in
existence (or is proposing to introduce) any share incentive scheme, share
option scheme or profit sharing scheme for all or any of its directors or
employees.


 


Payments on Termination


 


10.4         Except to the extent (if any) to which
provision or allowance has been made in the Last Accounts of the Target
Company:


 


(a)                                  no outstanding liability has
been incurred by the Target Company for breach of any contract of employment or
for services or for long service or redundancy payments, protective awards,
compensation for dismissal or for any other liability accruing from the
termination of any contract of employment or for services, and no such
liability will be incurred by the Target Company as a result of the
Reorganisation or the acquisition of the Target Shares by the Purchaser or
other performance of the terms of this Agreement and the Restructuring
Agreements;


 


(b)                                 no gratuitous payment has been
made or benefit given (or promised to be made or given) by the Target Company
in connection with the actual or proposed termination or suspension of
employment, or variation of any contract of employment, of any present or
former director or employee of the Target Company.


 


INSOLVENCY ETC.


 


11.1         No order has been made, petition
presented or meeting convened for the purpose of considering a resolution for
the winding up of any Target Group Company or for the appointment of any
provisional liquidator.  No petition has
been presented for an administration order to be made in relation to any Target
Group Company, and no receiver (including any administrative receiver) has been
appointed in respect of the whole or any part of any of the property, assets
and/or undertaking of any Target Group Company.


 


11.2         No composition in satisfaction of the
debts of any Target Group Company, or scheme of


 

















 


arrangement of its
affairs, or compromise or arrangement between it and its creditors and/or
members or any class of its creditors and/or members, has been proposed,
sanctioned or approved.


 


11.3         No distress, distraint, charging order,
garnishee order, execution or other process has been levied or applied for in
respect of the whole or any part of any of the property, assets and/or undertaking
of any Target Group Company.


 

















 


Part B: Tax and Property
Warranties


 


TAX


 


1.1           The Target Company has a tax
registration certificate which is in full force and effect.


 


1.2           The Target Company has complied in
all material respects with all statutory provisions, rules, regulations, orders
and directions concerning profits or corporate tax, value-added tax, business
tax and stamp duty in their respective jurisdictions.


 


1.3           No tax authority has agreed to
operate any special arrangement (being an arrangement which is not based on a
uniform application of the relevant legislation whether expressly provided for
in the relevant legislation or operated by way of extra statutory concession or
otherwise) in relation to the Target Company.


 


1.4           The Target Company has duly, within
any appropriate time limits, made all returns, given all notices and supplied
all information required to be supplied to all relevant tax authorities.  All such information was when provided and
remain complete and accurate and all such returns and notices were when
provided and remain complete and accurate and were made on a proper basis.


 


1.5           The Target Company has not received
any notice or allegation from any tax authorities that it has not complied with
any relevant legal requirement relating to registration or notification for
taxation purposes and the Target Company is not involved in any dispute or
investigation with any tax authority and there are no facts or matters which it
reasonably believes will cause any such dispute or investigation or any
liability for taxation (present or future).


 


1.6           The Target Company:


 


(a)                                  has paid or accounted for all
taxation (if any) due to be paid or accounted for by it before the date of this
Agreement;


 


(b)                                 is not under any liability to
pay any penalty or interest in connection with any taxation referred to in
paragraph (a);


 


(c)                                  has made all deductions and
withholdings in respect or on account of taxation which it is required or
entitled by any relevant legislation to make from any payments made by it
including, without limitation, interest annuities or other annual payments,
royalties, rent, remuneration payable to employees or sub-contractors or
payments to a non-resident and where appropriate the Target Company has
accounted in full to the relevant fiscal authority for any taxation so deducted
or withheld; and


 


(d)                                 taken all necessary steps to
obtain any repayment of or relief from taxation available to it.


 


1.7           All sums due and payable to any
taxation authority in respect of emoluments paid and benefits provided to the
employees of the Target Company at the date of this Agreement have been paid
and all such deductions and retentions as are required under the applicable
laws have been made.


 


1.8           All remuneration, compensation
payments, payments on retirement or removal from an office or employment and
other sums paid or payable to employees or officers or former employees or
officers of the Target Company and all interest, annuities, royalties, rent and
other annual payments paid or payable by the Target Company (whether before or
after the date hereof) pursuant to any obligation in existence at the date
hereof are and will (on the basis of the taxation legislation in force at the
date hereof) be deductible for incomes tax purposes either in computing the
profits of the Target Company or as a charge on the income of the Target
Company.


 


1.9           The Target Company has made or caused
to be made the returns which ought to be made by or in respect of the Target
Company for any taxation purposes and no returns are the subject of any dispute
with any tax authority.


 

















 


PROPERTY


 


2.1           The Properties and the Leased
Properties are in the possession and under the control of the Target Company.
The Target Company has valid title to, and leasehold interests in, all of the
Properties, free and clear of all security interests except for those which do
not materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Target Company.


 


2.2           Each Leased Property held under lease
by the Target Company is held by it under valid and enforceable leases in full
force and effect with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Target Company and no material default (or event which with notice or lapse of
time, or both, would constitute such a default) by the Target Company has
occurred and is continuing under any of such leases.


 


2.3           The Target Company does not own, operate,
manage or have any other right or interest, directly or indirectly, in any
other material real property of any kind save for those reflected in the Last
Accounts or other than as would not, individually or in the aggregate, have a
material adverse effect on the combined financial position, shareholder’s
equity or results of operations of the Target Company taken as a whole.


 

















 


APPENDIX 1


 


Prospective
Cellular Connected Transactions of the Company


 


1.                                       Transfer Agreement dated 20 November 2003
between the A Share Company and the Target Company regarding the transfer of
rights and obligations under a CDMA network capacity lease agreement.


 


2.                                       Transfer Agreement dated 20 November 2003
between the A Share Company and the Target Company regarding the transfer of
rights and obligations under a comprehensive services agreement.


 

















 


APPENDIX 2


 


Prospective
Cellular Connected Transactions of the A Share Company


 


1.                                       CDMA Network Capacity Lease
Agreement dated 20 November 2003 among Unicom New Horizon Telecommunications
Company Limited, Unicom Group and the A Share Company.


 


2.                                       Comprehensive Services
Agreement dated 20 November 2003 between Unicom Group and the A Share Company.


 

















 


APPENDIX 3


 


The
Restructuring Agreements


 


1.                                       Reorganisation Agreement dated
4 November 2003 pursuant to which Unicom New World Telecommunications
Corporation Limited acquired from Unicom Group its cellular business assets and
operations in the Territory.


 


2.                                       Restructuring Agreement dated
14 November 2003 pursuant to which (a) Unicom Centenarian (BVI) Limited
acquired from China United Telecommunications Corporation the entire equity
interests in Unicom New World Telecommunications Corporation Limited; and (b)
Unicom New World (BVI) Limited acquired from Unicom Centenarian (BVI) Limited
the entire equity interests in Unicom New World Telecommunications Corporation
Limited.


 


3.                                       Sale and Purchase Agreement
dated 20 November 2003 pursuant to which China Unicom (BVI) Limited acquired
from Unicom Centenarian (BVI) Limited the entire issued share capital of Unicom
New World (BVI) Limited.


 

















 


SIGNATURE PAGE


 


 


	
  SIGNED by

  	
  /s/
  Ye Fengping

  	
   

  	
   

  
	
  for
  and on behalf of

  	
   

  
	
  CHINA UNICOM (BVI)
  LIMITED

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNED by

  	
  /s/
  Shi Cuiming

  	
   

  	
   

  
	
  for
  and on behalf of

  	
   

  
	
  CHINA UNICOM LIMITED